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tv   World Business Today  CNN  July 30, 2011 1:00am-2:00am PDT

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>> good evening, i'm tom foreman. and washington in a hell for leather race against the clock. the republican deadline has cracked open. house speaker john boehner, after days of furiously urging members to line up behind him, has finally pass the debt reduction plan. as you saw a moment ago, the senate now in the process of killing it by effectively tabling it, because democrats are in charge over there. you heard harry reid speak moments ago, a big thumbs down over there, and then -- then -- we will move on. but the number of votes on either side really doesn't
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matter so much as this number. the number of days and hours now left until the money runs out. this is what we've been warning about for weeks and weeks. still, the vote today was enough to allow the republicans to spike the ball into boehner's court. and he did so with a vengeance. >> i struck my neck out a mile to try and get in agreement with the president of the united states. i stuck my neck out a mile. and i put revenues on the table. in order to try to come to an agreement to avert us being where we are. but a lot of people in this town can never say yes. a lot of people can never say yes. this house has acted. and it is time for the administration and time for our colleagues across the aisle, put something on the table. tell us where you are!
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>> well, over in the senate, what they are putting on the table is mr. boehner's bill. they'll kill it over there. that's under way right now. we'll let you when the voting is done on that. this makes the vote tonight in the house symbolic and represents a necessary step if a compromise is to be worked out in time. we'll consider all possibilities from all the angles tonight. take a look. default equals disaster, or does it? we've heard who the losers will be, but in america, one man's bankruptcy is another's billion dollar payoff. i'll ask ben stein if the worst should happens, who wins? and a balanced budget amount amendment, sounds simple. the tea party thinks some of we'll do the math and put it to the test. then, trick or tweet? the white house is a twitter urging republicans to tweet their congressman to compromise. social networking, or presidential propaganda?
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>> that's going to be our top story all evening long. this exciting evening at the capitol. the twist and turns on capitol hill, i have to admit, could be enough to make anyone's head spin. that's why we have our kate bolduan over there tonight to steer us in the right direction. kate, 24 hours ago, talking about how speaker boehner dent d not have the votes to pass his bill. today, a very different situation. when did the tide turn? and why? >> it seemed the tide turned, we definitely noticed it turned this morning. early this morning, a house republican meeting. a closed door meeting, and as they emerged from the meeting, we were hearing from members. members that were firm noes last night became yeses, and here is what changed. what changed, leaders changed the bill. if we could describe it to sweeten it up or just get more people on board. what they did was change the bill and tweaked it, and this is how they tweaked it. second debt ceiling extension that would happen early next year it, would be contingent
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upon passage, congressional passage of a balanced budget amendment. the original bill only called for a vote on it, not passage and this is a result of the push back from conservative members who didn't think it went far enough. this was able to get enough republicans on board as they just squeaked by the threshold, passing 218-210, with no democratic votes in support of the bill. so they were able to turn the tide early this morning, and they were able to pass the bill. now, this evening, though, there's quite a bit still at this late hour, tom, some -- i would say legislative maneuvering if you will. what is going on right now in the senate floor as we're seeing it right now, they are having a vote to table the measure. legislative -- legislative language to say they are voting to show that the boehner bill doesn't have the support to pass in the senate to set it aside.
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but to reserve it to bring it back up. that's happening in the senate this evening. and i learned in the house tomorrow, they are going to do a bit of a tit for tat and taking up the reid bill to vote on it to show the reid bill to raise the debt ceiling doesn't have the support to pass. >> things working out wonderfully up there. let me ask you another question about this. democrats already furious about the boehner bill to begin with. now they are adding the notion they had to approve the balanced budget amendment. i'm guessing that was a hand grenade in a hibachi. >> well said. well said. they do not support short-term extensions and don't want to be back, deadlocked in a few short months, which they think will happen. the balanced budget amendment in democrats are against, because they think it straps the hands of government in times of emergency, financial emergencies, times of war, where they would need to have an influx of money, where it wouldn't balance the books. in general they are against it
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anyway. an absolute no in the senate. at some point they will have to really start negotiating on a real bill that they can really pass both the house and senate and that's what we're looking to see, when that will happen. >> kate bolduan, i know you will keep us up to date. >> of course. >> later on tonight. across town to the white house to chief white house correspondent, jessica yellin. has the president had any reaction to the boehner measure passing? >> the president himself stayed quiet. but his press secretary put out a statement. they have essentially highlighted the role of the senate next. i'll read just a piece of it. jay carney has said that the boehner bill has been declared dead on arrival in the senate. he said senator reid's proposal, democrat that runs the u.s. senate is the basis for compromise moving forward, and the president urges democrats and republicans in the u.s. senate to find common ground on a plan that can get support from both parties. and the statement goes on
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by-to-say by tuesday, which is the day by which the u.s. could face possible default if there's not a deal. bottom line, all eyes focused on two men. senator mitch mcconnell and senator harry reid. no matter what is going on with the house of representatives and their game to try to vote on the reid bill tomorrow, the focus here will be on whatever compromise can be hatched between reid and mcconnell this evening or over the weekend to forge some kind of compromise on a negotiated bill that could get through the u.s. senate with 60 vote in the coming days and basically be jammed to the house before that tuesday deadline. >> as painful as this has been today, is the house encouraged by the fact that this hurdle has now been cleared? house republicans are able to make a statement and can move to the next stage? is there a sense of saying this is progress, even if it's progress we don't want, or simply saying it's a waste of time. >> a sense of saying this is over with the boehner bill is backing up a delay.
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they had to get that over with in order to get to the compromise that could be accomplished in the senate. there is a sense that hurdle has been overcome and they can focus on the next thing, but there is still that challenge what can get done, there enough time and what is the path forward? and there is this concern, still, once it gets to the senate and, you know, the biggest hope is the senate can get something done, can it get through the house? will the same people who took all of the days to negotiate the boehner bill, ultimately vote yes on a compromise measure on any kind of compromise measure? and there is a lot of anxiety among democrats. i would say here and on capitol hill that anything will get done in time. >> is it -- is there any hint -- very briefly here. any hint that the president will play a big role or small role this weekend in starting negotiations, or is he stepping back and letting them decide? briefly. >> all of the signals, he'd be willing to have a meeting if they thought it was productive.
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no clarity that they necessarily think that's the best way forward. the action really has to be on the hill. no meeting called yet. could be one called. do we really think that's the way to go? who knows. didn't work so far. >> thank you for joining us from the white house. if it weren't for our next guest, the boehner bill may not have passed. congressman rob woodall, a freshman in his seventh month in office. he was going to vote no on this bill. congressman, thank you for being us with. why did you change your mind? >> as you know, when these things come down on high, you haven't had a chance to take a look at it. john boehner has been so open in the process, this came down from on high, i was naturally suspicious from the beginning. in the details it did exactly what i needed it to do. moved the needle from spending to cutting, and for the first time in 15 years, it would give
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us a vote on the balanced budget amendment in the senate. those three things are very important to my incredibly conservative district back home. >> what happens next? if the senate comes back with their own version and somehow a compromise winds up in front of you in the very near future, that doesn't contain a vote on a balanced budget amendment or one that passes, what happens to your vote? >> you're right. that's a tough question. i've been in congressman seven months. i've never seen a reid proposal before this is the first proposal come from the senate in the entire time i've served in congress. i have no idea what to expect. but we've shown the senate all year long what our priorities are. we showed them in hr 1, the budget resolution, in cut, cap, and balance and showed them again today. if they can't see clearly where the votes are in the house, they are not reading the same voting records that i am. >> what do you need to see to vote on a compromise and move
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this thing along? as you know, many people in this country who worry what's coming next may make what happened the past few days look like a walk in the park? >> there is that worry, and the white house did a great job of whipping everybody up into a frenzy. what happened last week, when moody's and standard & poor's came out and said if you don't raise the debt ceiling, you'll have problems. but if you raise the debt ceiling and don't cut spending, you'll have the same big problems. that's the answer to your question. the compromise has to cut spending. we have to respond to what everybody in america is saying and what the world credit markets are saying which is our problem isn't the debt ceiling. our problem is the debt. >> cutting spending and the balanced budget amendment are two different things. one may accomplish the other, but this they are still separate things. is the balanced budget amendment a drop-dead requirement? >> i don't have a drop-dead requirement? i have a whole host of things
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that my constituents have sent me here to do. cutting spending is one thing and balancing the budge set another thing. what we can do right now is make sure we're cutting spending today. don't give me a deal that cuts spending ten years down the road. show me what you're going to do this year and next year, before americans go back to the polls. >> simple but sort of strange question. are you happy tonight? >> i'm not happy tonight. we started this process back in february. and it is embarrassing that i still have not seen a proposal come back over from the senate. are we moving a baby step forward because the senate is engaged? we are, but the american people deserve better than what they've been getting so far this year. >> rob woodall, i have a feeling have you a long weekend in front of you. hope it goes well. up next, so they can put together a budget deal without the house democrats? they sure as heck trying and one leading democrat doesn't like it one bit. he speaks out loud and clear, when we come back.
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there you have it. the clock going down to the debt limit and there is the voting taking place right now. a roll call vote on the floor of the u.s. senate, at the end of which in all likelihood, john boehner's hard-won bill from the house side will be dead as a mackerel. that's what it's about tonight, the continuing war about this. and among the factions fighting to shape a debt ceiling deal, one group largely left on the sidelines, that is the house democrats. the minority party is the red-headed stepchild in that chm per, sort of push ahead way from the table from more important
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counterparts on both ends of pennsylvania avenue. charles nadler is not very happy about that, nor how the debt debacle has played out. congressman nadler, thank you for joining us. tell me, first of all, at this point is there a path to a deal? congressman, i'm not sure if we have the congressman if he can hear me right now is there a path to the deal while the vote goes on to the senate? and i tell you what we're going to do. we're going to turn to david gergen, while we work out things with the congressman, because we want his comments. david, thank you for joining us this evening. you watched all of this today. did you find yourself encouraged, did you find yourself more discouraged? was this progress or was this nothing? >> well, tom, it's been a frustrating, almost a disgusting process for most americans to watch.
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and i -- i felt today, at least you can breathe a sif relief. broken the stalemate in the house and able to finally get trains moving, and the boehner bill will go down, we know that in the senate. the reid bill will go down in the house and probably won't get out of the senate, probably won't. and we'll get to real negotiations, but i think this constitutional requirement or the requirement that the house republicans put in today about having a balanced budget amendment, the passage of a balanced budget amendment in the house and senate, which requires 2/3 in both, as a prelude or condition for extending the debt limit is a nonstarter. it just -- it's like -- that's like asking a republican to approve huge tax increases in order to extend the debt limit. it's not going to happen. democrats and the president himself is not going to accept that. they have to find some other mechanism for getting a compromise here. two sides are close together on round one of budget cuts.
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it's the second round of budget cuts that would come next year or deficit cuts that would come next year in contention and a long way apart on finding a way to do that. and if they can find a mechanism, it goes back to the house and the real question, are there enough democrats who would come in, and enough boehner republicans who would join forces together? right now, it's elusive to see what that compromise would be that would bring those to a majority. maybe it could be done. it will require hard work in the senate to get it figured out. >> when i listen to speaker of the house john boehner when he went on the tirade even the floor, it looked like any kind of agreement is still a long way off. i want to listen to just a little moment of that, david, and get your comments. >> well, well, kind of like it is in congress. what i want and what i get are
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two different things. >> but, tom, you're so adept at this, you can dance your way out of this. >> maybe i should run for office. >> yeah. >> the point is, he was very upset today, as upset as i've ever seen him. not just him on the republican side. democrats have seemed very upset about this. as much as people want to put aside emotions and work on this there is a lot of emotion at work there, isn't there? >> oh, yeah. tom, when people look back after they've been in the congress, 20, 30, 40 years, there are usually one or two votes that stand out in their minds, a vote on war, for example. this is going to be one of those votes. this is going to be a time where everybody is going to know exactly what happened, how it unfolded, the tragedies, heart breaks, frustrations, maybe a moment of triumph hopefully by monday night. can i say one other thing? tom, you've been generous enough to give me the floor. even as we keep our eye on this
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debt ceiling fight which is so important, we ought to keep another eye on the economy, because the growth numbers that came in today on the economy were so terrible. >> they were dreadful, awful. >> awful. and here's our problem if we don't get this economy to grow soon, the -- the economy, if it remains this flat and comes in so subpar for a number of years, all of the money we're saving in the debt fight, we could lose about the same amount of money that revenues would go down, in other words, we could create $2.5 trillion of new deficits from a bad subcommittee over the next decade, even as we're trying to correct this huge fight this $2.5 trillion on the other side. so we're in a tough situation as a country, and it's going to take a lot of statesmanship, a lot of hard decision making and some people are going to have to swallow and get together with the other side and do things they don't really want to do, but somehow we've got to get the country through this. >> let me ask you one political
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question i found interesting today. many were angry about the provision about requiring a balanced budget. and they said -- they said this is a silly thing. you shouldn't be doing. it's meaningless. and i found myself thinking, yeah, but you told republicans they are going to destroy their bill anyway, it's going anyno why. so if they are making a statement, why wouldn't they throw everything in and say that's our statement. >> if it's just a statement, it's not a big deal. it's symbolic. but if house republicans are really making a condition of agreeing to compromise, that the compromise has to include a provision that says only if the senate and the house pass a constitutional amendment, not vote on it but pass a constitutional amendment will the debt ceiling be extended next year or otherwise we'll go back into a crisis. the white house and democrats
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are fine having a vote, because they don't think it's going anywhere. but making the debt ceiling extension contingent, conditional upon the passage of a constitutional amendment in the house and senate is a totally unacceptable proposition to the white house and to the democrats. and, again, it's akin to the democrats telling republicans, you know, the only way we'll accept a compromise is if we throw in $1 trillion in new taxes. forget it, we're not doing that if this is what compromise hinges on, we'll go into default. we have to find conditions where you can get a majority to vote for a bill. that's what a compromise entails, and it will be hugely important that mcconnell and reid and boehner and the president and pelosi figure this out, this rubik's cube, because as you said a few minutes ago and i think you're right. these guys are still pretty far
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apart emotionally, and, you know, and finding just the right combination that you can sort of turn the lock, if you would, and open the safe and get us out of this thing, it's not easy. >> and as much as we'd like to write the emotions off, they are a big deal, even on capitol hill. >> they sure are. david, gergen, thank you for being here. when we go back, we'll go back to congressman nadler at the capitol. you don't want to miss it. don't go away. i have astigmatism. so my old contact lenses would sometimes move out of place and blur my vision. my eye doctor said there's great news for people with astigmatism. acuvue® oasys for astigmatism. he said it's the only lens of its kind designed to realign naturally with every blink and created with hydraclear® plus. i'm seeing more clearly, crisply, comfortably, all day long. now life doesn't have to be a blur. [ male announcer ] learn more at acuvue® oasys for astigmatism.
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threats the clock counting down to the debt limit and the floor of the u.s. senate where john boehner's plan was just tabled, voted down 59-41, that's the vote as we understand it right now. nothing surprising about that we expect thad to come that way and the drama rolls on. congressman gerald nadler joins us now, a leading democrat. not happy about how the debt played out there. congressman nadler, welcome back. earlier today. >> this time i can hear you. >> earlier today, john boehner said the american people -- he said to the american people, i
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would have to say we've tried our level best. i know you're a democrat, but have you many republican friends. have the republicans in the house tried their level best? >> tried their level best to do what? they've repeatedly given us bills so far to the right and so injurious to the middle class and low-income people we couldn't consider them. and the fact is, they created out of whole cloth an artificial crisis around the debt ceiling. we raised the debt ceiling 50 times in the last 40-some years. a normal proceeding. no one ever doubted the necessity of raising it. the point is, to raise the debt ceiling is not to say we're going to spend a lot of money in the future. it's to recognize you have to pay the bills you incurred in the past as a result of decisions made two, three, five, seven years ago. in this case, mostly during the bush administration. nothing raising the debt ceiling, is the equivalent of having a fancy meal in a
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restaurant and getting the bill and saying, gee, my credit card say little full. i don't think i'll pay the bill. you can't do that. >> having watched out what played out over there, and particularly with the tea party wing of their party, watching that play out, do you see a path to a deal now? >> no, i don't. i've -- i've been afraid for the last few weeks that they will drive the country off the cliff that the country may well default and if we do that, it will be economically catastrophic. they can't seem to take yes for an answer. the fact, the first issue clearly most of the deficit that we have now about half of it, about half of it, is because of the bush tax cuts. a lot of the rest is because of the unfunded wars in iraq and afghanistan, started in the bush term which the first wars in american history that they didn't raise taxes to pay for. >> and in fairness, a lot of it
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is because of our economy has taken a tremendous nose dive. >> that's right. the economy has taken a nose dive. not because of any great spending splurge by the obama administration which didn't occur. >> so if you don't see a clear path forward right now, you have been there a while. you know how this sort of stuff works. how do we fashion such a path? >> the only way to fashion such a path -- let me say one thing. you have to understand how bad the boehner plan or anything they are insisting on is. i've seen too much commentary saying boehner and reid aren't that far apart, which is nonsense. the second half of getting the debt ceiling raised is dependent on a second $1.6 trillion spending cut, almost entirely from entitlements, you will have already eviscerated the direct spending part.
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you have to make draconian cuts in medicare, medicaid, and democrats cannot stand for that, period. we are not going to abrogate our commitments to seniors and people who are dependent. >> you said a moment ago, people are mistaken to say that mr. bainer and mr. reid are not that far apart this is knowledge you have. >> the plans released by them. no, no, no, no. i don't mean they. i mean the plans, the reid plan, boehner plan, if they are talking privately, i have no idea. >> you say those two plans are really really very far apart? >> they are very far apart. the reid plan counts a trillion in savings. the drawdown on savings from the drawdown on wars in iraq and afghanistan which is legitimate to do. the boehner plan says you have to have additional cuts of $1 trillion and that would necessity really murdering social security, medicare,
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benefits, and social security and so forth. correspond congressman nadler, thank you for joining us. hopefully between and you your republican colleagues, something will be worked out. >> if we don't work it out, the president will have to exercise his option under 14th amendment and we hope to persuade him to do that. >> thank you, we appreciate it. >> thank you. >> kate bolduan joins us. the vote just completed in the senate side, what can you tell us? >> hey there, tom. the vote, as we expected, they effectively blocked the boehner bill. 59-41. there are 53 members who vote with the democratic party and able to pull over several republican votes actually to defeat this measure. this was largely a symbolic vote for democrats to show and others opposed to the boehner bill, for them to show this measure didn't have the support to pass in the senate. they wanted to then move on to
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beginning these negotiations, those negotiations should begin in earnest. we've not heard they actually started happening, expecting and looking forward to learning more. we'll be hearing from democratic leaders, including harry reid on a press conference that will be happening in the next few minutes. i'll be heading over for, and tomorrow, a little tit for tat, the house has just announced they'll actually take up harry reid's bill, his proposal to extend the federal debt ceiling, only to do exactly what the senate just did. show that it does not have support to pass in the house. so we're looking forward now, after these kind of procedural maneuverings have happened to find out really where the negotiations are going to go, and really where the compromise is going to be found. >> all right. kate bolduan, thanks. i think we'll be checking in with you before the show is over. still ahead, you balance your checkbook. so requiring the federal government to balance its checkbook seems like it would make sense, but putting that into the constitution is a different story.
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we'll break down the numbers, when we come back.
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in some ways, this whole fight has come down to one gigantic explosive idea. a balanced budget amendment. the fury with which some members of congress pushed for it is matched only by the passion of those who think it's a terrible idea which will never happen anyway. could such a thing get passed? and would it work? to help us sort it out, he would called on gloria borger. >> hello. >> let's pretend your a
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level-headed member of congress. i'm a voter, walk in, i'm a voter and i walk in and flip open a folder. almost every state in the country, except vermont has a balanced budget provision. they don't just borrow their way out of trouble. why can't the federal government be like the states? >> first of all, tom, i would like to express my thanks for your confidence in voting for me as a member of congress, number one. >> all right, get along with it congresswoman. what's the answer? >> number two, i would like to tell you that the states operate very differently from the federal government. not as many responsibilities. for example, what about funding the military? homeland security, social security, medicare, medicaid. why would you want to put the federal government in a fiscal straitjacket if you have an economic down turn, for example, tom? and you have to fund things like unemployment insurance and then
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there are things like immigration you need to deal with. and what about international relations, such as -- >> okay, so your point is the federal government is a much bigger thing. a lot more complex. a lot more responsibility and they have no safety net. if i get involved as a state, i can turn to the federal government. who can they turn to? >> that's right. >> i want a balanced budget amendment. look at this, deficit spending has been massive in recent years. 2007, $500 billion. look at it down here. and look at the debt over here. also crazy. it's now up to $14 trillion. i think if i do not put a leash on all you congressional types, you will be spending and spending and spending us into the poor house. >> you're right. we need a leash. i think you're absolutely right. congress has been on a bit of a spending binge, and that goes for democrats as well as republicans. there are no conservatives in committee when it comes to
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getting things for your own state. but i would also say when you put yourself in this kind of a straitjacket and you have to balance the budget, you're going to have to raise taxes at some point. lots of people don't like that. republicans say there's a way to do it without raising taxes, but also there's a question of whether this could cost you jobs. >> so even if you don't want to do that, you're saying if i'm trying to address a $14 trillion debt right now and a great big deficit, trying to pull out all of the stops and say a balanced budget amendment will help it, maybe won't work the way we think it would, could be try something less ambitious than a balanced budget amendment, some kind of controls on you? >> that's exactly what members of congress are talking about doing now. those who don't want a balanced budget amendment. they are talking about all kinds of spending caps and automatic triggers.
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if you go above a certain level, then the spending gets cut off. so these are things that are -- that are being talked about right now. obviously, you need to stop them before they spend again and they kind of get it. >> i'm worried about this, look at this study from maryland. they are a nonprofit group. they did a study where they found that a 22% reduction in federal spending would mean 150,000 jobs lost. i'm concerned about that. i'm taking you seriously, congresswoman, but i still want to try to have this balanced budget amendment, and i think if you'll just take it to the floor and let people vote on it there, it will be approved. what do you think? >> you know, you can have all of the votes you want, but it's been a very difficult thing to pass. it almost passed once years ago and lost by one vote. but you need 2/3 of the house and senate. see what's going on with the debt ceiling debate? you can get bear majority right now, so you need 2/3 of the house, 2/3 of the senate and
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then it needs to go to 38 states to ratify. so we're talking about a process that could take a decade, if it succeeds at all. >> so it's a complex process, a process where there are a lot of questions about how much it would even work, even if we did it while there is still respect for the idea that maybe some kind of controls on congress might not be a bad thing, even fitz the balanced budget amendment that does it. >> i would say stop them before they spend again, tom. but there has got to be a good way to do it. >> you keep this up and we may raise you from congressman to senator. >> thank you. then i only have to run every six years. >> always good to run the numbers with you. and heaven knows we've been running numbers all over washington. coming up, what happens if the sky falls. ben stein is an economist and i'll ask him what to expect, next.
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announcer: when life's this hard, it's no wonder 7,000 students drop out every school day. visit and help kids in your community stay in school. that is the podium where at any moment now, we expect senate majority leader harry reid to step up and talk about essentially killing the boehner bill, and what's coming next as if anybody really knows in washington. we'll try to find out. right now, we want to turn to our resident economic guru, ben stein, joining us and watching this. i can see you're thrilled by the activity of the day.
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>> i'm very thrilled. what happens if government just goes into default and the bonds are in default? confidence is the coin of the realm in this economy, any free market economy. we have a terrible economic situation. if the economy and the people that make investment decisions and hiring decisions lose confidence in the running of the economy, there is going to be less hiring, less investment, less confidence in every aspect of the economy, and it's going to be a very bad thing. >> do you think anybody can have more confidence at this point? >> no, i do not. i think we have a bunch of very confused people running the country at this point. i hate to say this, because i've been a republican longer, i am sure, than any member of the tea party in congress, but the tea party people are a little off base trying to get this cut so quickly and so drastically. i certainly agree with trying to cut the budget over long periods of time, but cutting this
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quickly is risky and dangerous. and as to the questions you were asking my very good friend and a person i admire very much, ms. borger, a balanced budget amendment? how about balanced over the cycle. so periods in high unemployment, we're running a surplus and periods of low prosperity, we're running a deficit. how about balancing it over the cycle? that's an idea my sainted father proposed 50 years ago and i think it's still a pretty good idea. >> explain a little more how that works. i have heard that term before, balanced over the cycle, versus balanced budget? it would be balanced exactly at 5% unemployment, and at 9% unemployment, would you allow it to run a deficit 10% above of the total budget, and running a surplus of say 4% unemployment, very high degree of prosperity, would you run it to run a
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surplus, used to pay off the money from the previous borrowing so balancing it over the cycle is an idea which, if i may say this, i don't get any residuals for it, my father brought it up close to the end of world war ii, about 70 years ago now, and it seems to me a good idea for our times. we have got to get the people in the tea party to come on board and come back to planet earth. they are wonderful people. i know many of them, but we just can't do what they want to do as suddenly as they want us to do it. we just can't do it. >> let's talk a little bit about what happens in a time like this. anybody benefit from a debt stalemate? there always seem to be wall street types that can make a buck on it. >> yes, yes. people will be selling short various types of securities that will go down if the debt impasse is not solved. all different kinds of securities. there are actually securities being custom made right now as a means of betting on whether or
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not there will be a default. so there will be people making great, great deal of money off this. it won't be you or me or you or i, it will be people who operate on a very high degree of dexterity and moving around huge sums of money. but the ordinary american will just get a lot of panic and nausea out of this, which is exactly what we don't need. we won't recover as long as people in this country, especially in the hiring arena, are scared. we won't recover with this much fear and congress is generating a lot of fear right now. >> the gdp number didn't help. nothing is happening. what does this tell us about the economy? democratic side, they say it's recovering slowly. what do you think? >> well there, is no known economic theory where defaulting is unknown. if that's a theory, it's an unknown theory to everybody else.
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we have to have the government unite together, unit behind a plan and go forward in such a way that people in the business community say we're being governed by sound, sensible, careful grownup people and we are going to go forward and build the new man in spartanburg or sacramento. we have this feeling that somewhere down the road we'll have responsible eisenhower type leadership. i keep going back to the fact, what would dwight eisenhower say about these people? he was a fine republican president. he would be horrified by the idea that they would stick to convictions where they would put u.s. treasury bonds in default. i don't think dwight eisenhower could imagine that we would do such things to america. >> do you think we're headed toward a double-dip recession, after watching all of this? >> well, it's -- if it's not a double dip recession already,
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it's a painfully, painfully cruelly slow recovery. the double dij recession is almost unheard of. there might have deputy one at the beginning of the '70s. very, very rare. but we might be having one. we have just smacked investors, buyers around, so harshly, telling them basically we don't have good leadership in this country, that it's cruel to expect them to do much. and by the way, not all the blame by any means lays on the tea party. president obama doesn't have a comprehensive plan to get us from here to substantial savings five years from now, ten years from now. generalities, but nothing specific. we have to have much more care exercised from the white house and much more care from capitol hill. much more. >> we have to move on. thank you, ben stein. we appreciate your thoughts, as always. >> thank you very much. thank you. don't be misled.
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all of the talk about balanced budgets and debt ceilings, this is not all of the economy, stupid. much of the is pure politics. we'll navigate the treacherous waters with a man who knows how to swim with the sparks, in just a moment. any questions? no. you know... ♪ we're not magicians ♪ we can't read your mind ♪ ♪ read your mind ♪ we need your questions ♪ each and every kind ♪ every kind ♪ will this react with my other medicine? ♪ ♪ hey, what are all these tests even for? ♪ ♪ questions are the answer ♪ yeah ♪ oh
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we have now been told that senator harry reid will be speaking at the top of the hour. we'll, of course, go live to that. the moment it begins happening. this debt ceiling fight is absolutely a political game. a 21st century political game, in fact, playing out in every medium, including twitter, as the president turned up the heat on republicans, 140 characters at a time. bob schrum is a great political gamer guiding political campaigns. welcome, bob. i'm glad you joined us here tonight. you've been in the political game a long time. do you think gamesmanship has gotten out of control on this issue?
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>> i absolutely -- we have always raised the debt ceiling, raised it over and over again. both parties have done it something you have to do to preserve the full faith and credit of the united states and keep the economy as ben stein just said from basically melting down. people have postured on this before. barack obama voted against raising the debt ceiling in 200 6. he said that was a mistake. no political party actually gone down the road that would take us to default. that's what we're at the edge of right now and it's extraordinary. your right, tom. it is 21st century politics. >> what do you you make of the tea party? they could go home and say we did exactly what voters asked us to do, we were effective and we're not apologizing. >> i think that's what they will say. and john boehner i think understand the danger here for
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republicans, so does mitch mcconnell. an old jfk line. those who ride the back of the tiger often end up inside. last year, the republican party rode the back of the tiger. he couldn't do the deal he wanted to do, $4 trillion with the president. he couldn't do the deal he presented yesterday, but he to go back and offer this absurd constitutional black mail you have to propose this balanced budget amendment to get enough votes through the house. >> have you been a loyal democrat a long time. that said, many democrats and we've asked about this on the show, have complained that president obama has not been out front enough about what he wants. when you watch him, you ever find yourself yelling at the tv set? >> no, i actually thought last friday, when he went out to the press corps and outlined pretty much what was in the $4 trillion deal, he was very forthcoming.
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he did negotiate. he didn't put everything on the table. he said, but we can deal with entitlements, we have to deal with the revenue side. he actually had boehner i think agreeing to a certain amount of revenues and boehner discovered he couldn't get it through his own tea party caulk us. boehner face as a huge political problem if the senate approves something. if the senate approves something and it goes back to the house, he has to decide whether it goes to the floor for a vote. if he denies it a vote, and the country goes into default, i think republicans would have to think twice next year about their chances of succeeding at all in 2012. >> i understand that will be a very interesting weekend. i understand how mr. boehner face as a real problem here, but in some ways, couldn't you say that all of official washington face as a problem here? because effectively, have you
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about 60 young freshmen congressmen who have somehow stymied everyone. >> you've got about 1/5 of the house of representatives, which right now is trying to run the country. i call it a constitutional coup de etat. we never functioned that way. we'll see a real test of the this weekend. can the adults in the room take some risks? can mitch mcconnell negotiate with harry reid? and can boehner at least announce a vote on something that can pass the senate and the president will sign? boehner lost his leadership position in the 1990s. he doesn't want to go through that again. today's vote was much more about saving his speakership than saving the full faith and credit of the united states. >> very briefly, does anyone have an ace up the sleeve here? >> no. i think we're going to have to hope that people have like three deuces and two queens and you can put that together and that that can be a winning hand. it ain't going to be a hand of aces.


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